The dollar lost ground again in N.Y. on Tuesday, sliding toward 101.50 versus the yen, and maintaining altitude near 1.3950 against the euro. With the odds of further BoJ and ECB easing slipping, the dollar could remain under pressure for now. Cable traded to near 1.7000, with only reported barrier option defense keeping the pairing on the 1.69 handle. USD-CAD meanwhile, fell to one-month lows near 1.0880. On the economic calendar, the March trade deficit narrowed, though was in-line with expectations, and had little impact.

[EUR, USD]EUR-USD ran out of steam just over 1.3950 soon after the N.Y. open, though pulled back to just 1.3920 in ongoing light dealings. The improved PMI's from the Eurozone should keep the euro elevated into the ECB meeting, where odds for further easing measures have faded some most recently. Should the euro remain bid into the meeting, we see some risk for a "sell-the-news" reaction from EUR-USD.

[USD, JPY]USD-JPY opened near 101.80, and eased lower through the morning session. The pairing found some buyers at 101.50, with intra day short covering behind the modest bump higher. The April base of 101.33 is touted as initial support, with sell-stops growing now at 101.20. As the BoJ remains confident inflation will meet its targets, the timing for further BoJ stimulus is largely being pushed back by the markets, which could well result in further USD-JPY downside potential.

[GBP, USD]Sterling rallied on strong PMI data out of the U.K., with the services reading for April rising to a nine-month peak of 58.7, well up on the market expectation for an unchanged 57.6. Cable lifted about 20 pips to the 1.6952 area initially, though headed to 1.6996 highs in N.Y, a five-year peak. Talk of 1.7000 barrier option defense selling was heard.

[USD, CHF]EUR-CHF fell to a three week low of 1.2159 in N.Y. trade on Tuesday, as risk-off and geopolitical tensions supported the franc. The cycle low of 1.2104 and 1.2100 are considered key support levels. While situation in the Ukraine remains a concern, and a potential supportive factor for the CHF, the threat of SNB intervention into its 1.2000 limit peg is helping to deter franc buying to some extent.

[USD, CAD]USD-CAD traded to 1.0898 lows early in the session, levels last seen on April 10. The pairing followed the greenback's general path lower, though found corporate buyers into the 1.0900 level. U.S./Canada interest rate differentials were marginally in the CAD's favor this morning. The pairing later touched 1.0881 lows in the aftermath of the better IVEY PMI outcome, with the move under 1.0890 opening the door for a test of the April 10 trough of 1.0868. Bids are seen coming in at 1.0870-60 now.